Kingfisher expects Government to open domestic market to foreign carriers

Kingfisher Airlines stated it expects the Indian Government to open the domestic market to foreign carriers stating: "FDI (foreign direct investment) policy is expected to allow foreign airlines to take equity stakes in domestic carriers in the near future" (Reuters, 28-Jan-2011). The Ministry of Civil Aviation has moved a proposal in 2009 to allow foreign airlines to acquire 25% equity in local airlines.

The USD10 billion deal will create the world’s third largest lessor - and they may be more to come yet.

Avolon itself was only recently acquired by HNA Group, with the USD2.7 billion purchase agreement being finalised in Jan-2016, via Bohai Capital Holdings.

Avolon is now the core aircraft leasing brand for the HNA Group. Including assets from Hong Kong Aviation Capital, Bohai Capital and several smaller HNA Group leasing firms, Avolon has a fleet of nearly 250 aircraft and almost 200 more on order.

Aviation has yet to define India’s role in the trans-Pacific growth story. Geography allows connections from North America to India via Europe, the Gulf and – more quietly – Northeast Asia. Northeast Asian airlines have a theoretical advantage linking India with the North American west coast. The challenge they face is fitting a square peg into a round hole.

The presence of Northeast Asian airlines is large in North America but small in India, while Southeast Asian airlines are small in North America but large in India. Cathay Pacific, and to a lesser extent All Nippon Airways, are in the strategic sweet spot, relatively. Growing China-India relations could result in Chinese airlines playing a larger role in this market. The different transit regions available mean that there is competition between partnerships and joint ventures. These pressures could grow as the Indian market continues expanding.